Eleven years since TransLoc’s
first bus tracking app launched on NC State University’s campus, the RTP tech firm working to solve the woes of public transit has landed its first outside capital.
The massive $8 million series A round, closed this week, is led by Durham-headquartered social impact investor SJF Ventures
and a mobility-focused fund founded by Ford Motor Co.’s Bill Ford
, with participation by Salesforce CEO Marc Benioff’s
personal investment fund.
To some in the startup community, funding to TransLoc might seem like a long time coming. But to CEO Doug Kaufman and his investors, the timing was perfect.
It’s been nearly two years since Kaufman took over as CEO and started an aggressive product development cycle that’s led to a powerful data analytics platform for transit agencies, an app that lets agencies offer rides on-demand and a landmark integration with Uber that makes riding the bus (in the Triangle and Memphis, so far) easier than ever for consumers.
A revamped sales and marketing process helped the company add more than 100 university and municipal customers in recent years. Key hires have built a team of experienced executives prepped to scale both the customer base and the team. At least 30 new employees will soon join a staff of about 50 today.
It’s also great timing in mobility. Only in the last year have investors and consumers called for a multi-modal technology solution, meaning one app and platform for finding, planning and booking the best route from here to there.
Work is well underway at TransLoc to build it.
“Here’s a company based in Durham doing something nationally that is more innovative, at scale and farther along than dozens of others we’ve spoken to,” says SJF founder Dave Kirkpatrick, who along with SJF associate Christine Primmer led the round.
TransLoc stood out from competitors
Serious conversations with investors began months ago, around when TransLoc began publicly casting a vision to “take public transit from last resort for some to first choice for all.”
Because of its laser focus on funding next-generation mobility, the Ford fund, Fontinalis Partners
of Detroit, already had TransLoc on its radar. When an introduction was made by a leader at Durham-based Investors Circle, Fontinalis partner Chris Stallman was ready to talk.
“We believe public transit really isn’t going anywhere in these next 20 to 30 years but we also see a proliferation of all these new models—we're investors in Lyft,” he says. “It’s an increasingly competitive environment for public transit, and service-level improvements aren’t going to be enough.”
Different from competitors in the field—mostly ex-transit industry leaders—Stallman found the TransLoc team focused on real product innovation that moves the industry forward.
“This is the first team we’ve seen (...) that is solving multiple pain points, more than just where is the bus and when is it going to arrive,” says Stallman, a new TransLoc board member. “They are thinking about the opportunity in a much bigger way than many of their competitors.”
Product was also a driver for SJF's investment, only its third in the Triangle (behind Aseptia and Validic) since the fund's founding in 1999.
Though SJF hadn’t made an investment in a transportation-related startup, it was an area of strong interest for the firm and limited partners like Citibank (funder of the Citibike bike-sharing program in New York). After interviewing dozens of users, customers and prospective customers, Kirkpatrick and Primmer found TransLoc to be solving the issues of transit agencies while meeting the needs and expectations of consumers who use its Rider app.
The company's focus on creating a suite of products—a strategy reminiscent of the EdTech firm Blackboard, where Kaufman cut his teeth, Primmer says—made it an easier sell to agencies. They can work with one partner on various technology and data-related needs.
The SJF team also got excited about the on-demand functionality, which helps municipalities reduce the cost of transportation for disabled residents and universities the cost of providing safe rides, and work underway to create an API marketplace for agencies to customize the functions they offer in the TransLoc Rider app.
"TransLoc is really well positioned to be a central connecting point for different apps and tech players trying to bring multi-modal options to passengers," Primmer says.
Investor lineup strategic
Kaufman says SJF was his first choice among local investors, and Fontinalis, tops among strategics. Benioff provided not just funding and global connections, but a pay-it-forward bent. All proceeds of his fund, called Efficient Capacity, are donated to charity. He was a connection through TransLoc board member Jason Massey.
The round also includes The Patient Capital Collaborative, a fund tied to Investors Circle, the national network of impact investors. Kaufman anticipates many connections in cities around the U.S. through that group. And he's got a repeat investor in Tom McMurray, a former
Sequoia Capital partner who invested in Kaufman's prior startup Spring Metrics and is focused on conservation and sustainability. Square 1 Bank also provided capital.
Kaufman says his key priorities for the funding will be to continue product development, specifically on that API marketplace, which will allow other tech providers (like Uber) to connect to the TransLoc platform and let riders access more modes of transit besides bus and Uber (Train is coming soon in some cities).
There will be more dollars for sales and marketing—Kaufman says TransLoc has developed a process that’s dramatically shortened the typically slow municipal sales cycle. And customer support and services will staff up to continue to be a priority for the company as it grows—Kaufman is proud that TransLoc has rarely lost a customer.
He also hopes to take advantage of the network of his new investors. Fontinalis, for example, has a whole portfolio of companies that could be connected to the TransLoc platform or marketplace, or who might introduce the company to new customers.
Kaufman says he's often gotten the question, why now after 11 years?
The answer is as clear as ever.
"We've got this big paradigm shift happening. We're in a great place with the team. And product adoption has been so great," he says. "We really have the company ready to scale—it's the perfect time."